Unmasking Disruptive Innovation: Industry Seeks Proven Water Technologies That Meet Customer Needs

As sector leaders address major water challenges and impediments that hamper innovation and efficiency-focused strategies, water tech companies throughout the world continue to develop and tee up their disruptive and cutting-edge technologies.

Disruptive water technologies are displacing incumbents' technologies and helping companies to create high growth markets within mature markets, above average profit margins, and a sustainable first mover advantage.

Growing Interest in Solutions and New Business Models

Awhite paperfromErnst & Youngthat summarizes in-depth interviews with industry leaders reports that there is a growing interest in proven solutions, business model innovation and technological adaptation. This, coupled with long-term financing alternatives,crowdsourced funding,and harmonized policies and regulations, has the power to boost institutional and market efficiencies and favorably affect the long-term sustainability and growth of the sector.

"While there is this growing interest, acceptance, and applicability of novel and disruptive water technologies, and despitemarket growthconstraints and other barriers, the industry has already adopted many disruptive innovations and continues to do so at a faster rate than it did 20 years ago," according to Paul O'Callaghan, CEO,BlueTech Research.

"Disruptive technologies can open up new market applications which did not previously exist, accelerate the pace of technology adoption, strengthen corporate growth, and drive regulatory activity. Differentiated products and services can displace incumbents' solutions in mature markets. Membrane bioreactor technology, for example, achieved market share in a crowded, commodity, fragmented, low margin market.Ultraviolet (UV)disinfection took market share from chlorine disinfection," O'Callaghan explains.

However, "innovation is only innovation if it meets client need," he adds.

Technology Innovation Playing Field Expanding

The playing field is expanding as larger water tech companies, corporations, and water utilities step up innovation and intrapreneurship, take a different approach to R&D, and identify internal champions to support the development of new products and technologies.

O'Callaghan says that many large corporations not traditionally associated with water (e.g.BASF,Outotec,Bilfinger,Lockheed MartinandMann+Hummel) are complementing in-house innovation with acquisition of cutting-edge tech companies that are relevant to their business strategies and those that present technologies that sit further along the technology commercialization continuum.

To further speed innovation adoption and strengthen the water innovation ecosystem overall, Ernst & Young believes industry frameworks for assessing and adopting new technologies need to be established. "This would involve creating consortia to incubate, validate and promote new technologies and would reduce the need for emerging companies to undergo multiple field trials and encourage large utilities to set R&D budgets," the report explains.

Communicating About Disruptive Technologies

Disruptive innovationhas the potential to change the world of water and the progression of the industry in many ways, some of which we have not even imagined. Start-ups need to be mindful of the way they communicate about their technologies and should call their technologiesdisruptive only if a third-party validates the disruptive nature of their technology.

Educating the market about a technology takes a long time. When a label like disruptive can be substantiated by an external sources, it further validates andenhances credibility of the "disruptive" claim. Despite challenges that affect the pace oftechnology commercialization (e.g., limited funding for technologies in the public sector, a risk-averse water industry culture),disruptive technologies can enhance the water industry's growth, efficiency, and sustainability. Asnew funding optionsincrease,start-ups and established companies can carvea distinct competitive market advantage and the right to implementbreakthrough marketing, communication, and "leader of the pack" news headlines. That's good for all parties.